Man receives jail time for Bitcoin operation on Silk Road

A man who ran a Bitcoin exchange operation will serve prison time for selling the digital currency to Silk Road users making illegal purchases.

Robert Faiella, 55, of Fort Myers, Fla., was sentenced to four years in prison, three years of supervised release and was ordered to forfeit $950,000 associated with the operation, according to the FBI.

Known as “BTCKing”on Silk Road – the now defunct cyber black market – Faiella would receive orders from other anonymous users for Bitcoins.

In order to satisfy those orders he'd use BitInstant, a service that allowed customers to purchase Bitcoins anonymously with cash for a service fee, and later sold the digital currency at a marked up price to Silk Road users looking to make illegal purchases.

Charles Shrem, former BitInstant CEO, cooperated with authorities, telling them that Faiella made nearly $1 million in exchanges.

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